Form It-711 - Partnership Income Tax General Instructions

ADDITIONAL INFORMATION

reckoning according to the laws of descent and distribution.

CORPORATE PARTNERS OF PARTNERSHIPS

Also, this exemption does not apply to a partner that participates

A corporation will be considered to own property in Georgia,

in the management of the partnership or that is engaged in a

do business in Georgia, or have income from Georgia sources

unitary business with another person (including entities) that

whenever the corporation is a partner, whether limited or

participates in the management of the partnership.

general, in a partnership which owns property or does

business in Georgia, or has income from Georgia sources.

GUARANTEED PAYMENT EXAMPLE

LIMITED LIABILITY COMPANY

The following example illustrates how guaranteed payments

Each limited liability company and foreign limited liability

should be treated when there is a nonresident partner: There

company shall be classified as a partnership for Georgia

are two partners in the partnership. Partner One is a resident of

income tax purposes unless classified otherwise for Federal

Georgia and owns 25% of the partnership. Partner One receives

a guaranteed payment of $10. Partner Two is a nonresident of

income tax purposes, in which case the limited liability

company or foreign limited liability company shall be classified

Georgia and owns 75% of the partnership. Partner Two receives

a guaranteed payment of $40. The profit and loss sharing

for Georgia income tax purposes in the same manner as it is

classified for federal income tax purposes.

ratio is the same as the ownership percentage. The Georgia

apportionment ratio on line 2, schedule 6, of Form 700 is 50%.

NET WORTH TAX

Ordinary income reported on

The partnership return is for information only. Therefore,

line 1, schedule 7, of Form 700 ................................... $100

partnerships are not subject to net worth tax.

Guaranteed payment reported on

line 5, schedule 7, of Form 700 ......................................$50

PARTNERSHIPS

Total income for Georgia purposes,

WITH NONRESIDENT PARTNERS

line 12, schedule 7, of Form 700 ..................................$150

Nonresident partners of partnerships doing business both

Partner One (resident) is required to report $35 on the Georgia

within and without Georgia shall compute their proportionate

return. The entire $10 guaranteed payment plus the share of the

part of the partnership’s allocated and apportioned income

ordinary income of the partnership, which is $25 ($100 ordinary

from the schedules on Form 700. Georgia net income

income placed on line 1, schedule 7, of Form 700 multiplied by

computed on Line 7 of Schedule 1 should be multiplied by the

the ownership percentage of 25%). Partner Two (nonresident)

percentage of ownership. This amount is further adjusted by

is required to report $58 on the Georgia return. The Georgia

the partner’s share of the separately stated items mentioned

portion of the guaranteed payment is $20 ($40 guaranteed

in the Federal Tax Changes section on page 1 and the

payment multiplied by the Georgia ratio of 50%) plus the share

Adjustments to Federal Income section on page 5.

of the Georgia portion of the ordinary income of the partnership,

A partnership that owns property or does business within this

which is $38 ($100 ordinary income placed on line 1, schedule

State is required by O.C.G.A. § 48-7-129 to withhold on the

7, of Form 700 multiplied by their ownership percentage of 75%

annual partner’s share of taxable income sourced to Georgia.

multiplied by the Georgia ratio of 50%).

The withholding tax rate is 4%. Withholding is not required

if the annual partner’s share of taxable income sourced to

FREQUENTLY ASKED QUESTIONS

Georgia is less than $1,000. Also there are various exemptions

Answers to frequently asked questions regarding corporations, S

from nonresident withholding. See Regulation 560-7-8-.34

Corporations, partnerships, LLC’s, and nonresident withholding

and Form NRW-Exemption. As an alternative to withholding,

are available on our website at

the partnership may file a composite return (Form IT CR) for

its nonresident partners. Permission is not required to file a

TELEPHONE ASSISTANCE

composite return. Please check the Composite Return Filed

Composite Returns ...................................... 1-877-423-6711

box on Page 1 of Form 700.

Employer Withholding Information............... 1-877-423-6711

Subsection (c) of O.C.G.A. § 48-7-24 provides an exemption

Income Tax Forms ....................................... 1-877-423-6711

from Georgia income tax for a nonresident partner who

Registration & Licensing Unit ...................... 1-877-423-6711

receives income from a partnership which derives income

exclusively from buying, selling, dealing in, and holding

securities on its own behalf and not as a broker. Accordingly,

withholding under O.C.G.A. § 48-7-129 would not apply in

this situation.

Note: This exemption does not apply to a family limited

partnership or similar nontaxable entity, the majority interest

of which is owned by one or more natural or naturalized

citizens related to each other within the fourth degree of

Page 8

Form It-711 - Partnership Income Tax General Instructions - 2015 Page 9

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